UK Grapples with Surging VPN Use and Black Market Activity
The UK Gambling Commission (UKGC) has released an analysis highlighting significant challenges in monitoring illegal gambling. According to Tim Livesley, Head of the Data Innovation Hub, updated data through February 2026 shows volatile user engagement with unlicensed sites, with no clear seasonal pattern or sustained growth over a 21-month period.
A critical factor complicating this analysis is the sharp rise in Virtual Private Network (VPN) usage. Following the implementation of the Online Safety Act in July 2025, VPN use stabilized at levels approximately 40% higher than before the legislation. This surge makes it much harder to accurately measure the true volume of UK consumers accessing the black market.
While the UKGC cautions that web traffic estimates are better for trends than absolute volumes, the data shows hundreds of millions of minutes are spent on these sites monthly. The Betting and Gaming Council (BGC) further underscored this issue, estimating that up to £100m may have been wagered with illegal operators during the recent Aintree Festival. The regulator plans to enhance its methodology by collaborating with international bodies and licensed operators.
Operators Face Financial Headwinds from Tax Hikes
While regulators tackle the black market, licensed operators are navigating their own financial pressures from increased taxation. FDJ United reported that its Q1 2026 revenue fell by 3% to €895 million, largely due to a €24 million impact from gaming taxes. The company's performance was particularly hampered in the UK and Netherlands, where recent tax hikes contributed to revenue declines of 24.1% and 19.9%, respectively.
Similarly, Codere Online is navigating a difficult landscape in Mexico, its core market, where the gambling tax rate rose from 30% to 50%. Despite posting record Net Gaming Revenue (NGR) in FY25, CEO Aviv Sher expressed concern over the impact of such changes.
Aviv Sher highlighted the risks of over-regulation, stating, “The more [rules] they apply, the less we are able to operate and grow our margin and market share... the money will go to the black market and out of the regulated market.”
Codere Online is avoiding expansion into Brazil due to the high cost of entry and is instead doubling down on its localized strategy in its core markets of Mexico and Spain. FDJ has also initiated a management change, with a new team “fully committed” to a turnaround in its struggling markets.
Global Regulatory and Enforcement Actions Intensify
Regulators worldwide are actively refining their approaches to compliance and player protection. These actions demonstrate a clear trend towards stricter oversight in various key markets.
South Korea and the Netherlands Update Protocols
In South Korea, casino operator Kangwon Land was fined KRW564 million ($382,400) for significant anti-money laundering (AML) failures between 2022 and 2024. The South Korea Financial Intelligence Unit (FIU) cited the company for not verifying 11 transactions and failing to retain tens of thousands of financial records and customer ID documents. Following the fine, Kangwon Land has partnered with the Game Rating and Administration Committee (GRAC) and local police to combat illegal gambling.
Meanwhile, the Dutch regulator, Kansspelautoriteit (KSA), has introduced a new mechanism to simplify the self-exclusion process. The change makes it easier for court-authorized guardians to register at-risk individuals in the national CRUKS scheme, reducing the evidence required and shortening the processing time to two weeks.
| Jurisdiction | Regulatory Action | Key Detail |
|---|---|---|
| United Kingdom | Black Market Monitoring | 40% spike in VPN use obscures data on illegal gambling. |
| South Korea | AML Enforcement | Kangwon Land fined KRW564 million for compliance failures. |
| Netherlands | Player Protection | Simplified process for third-party CRUKS self-exclusion registration. |
| Australia | Technology Assessment | ACMA report finds AI use is outpacing the current regulatory framework. |
The Technological Frontier: AI and Instant Games
As the industry evolves, technology is playing a dual role as both a tool for operators and a challenge for regulators. The Australian Communications and Media Authority (ACMA) released a report noting the rapid adoption of Artificial Intelligence in the gambling sector. Operators like Sportsbet and Tabcorp use AI for identifying at-risk players, while others like Betfair Australia and PointsBet use it for advanced odds-setting and fraud detection.
The ACMA cautioned that the current framework, based on the Interactive Gambling Act 2001, is not equipped to handle modern AI. This gap raises complex questions about accountability, especially with autonomous AI systems. The report also noted that general-purpose AI chatbots have been found to direct users toward unlicensed offshore sites.
On the product front, content provider ICONIC21 is championing the rise of “instant games” to capture modern players' limited attention spans. CPO Edvardas Sadovskis points to the “TikTok-ification of gaming,” where quick, engaging formats like Plinko and Crash games are becoming central to operator lobbies. This shift focuses on active participation and a sense of player agency, moving away from the more passive experience of traditional slots.
